America in the late 1800s was faced with a new and menacing challenge to its financial well-being. We needed at that time, new laws to stop and prevent a single company from owning or controlling all or nearly all of the market of a product or service, thereby creating a monopoly.

In 1890, antitrust laws were created federally with the enactment of the Sherman Antitrust Act. The Sherman Act was enacted in large part because Standard Oil of Ohio sought to control an industry by buying up stock and getting control of competing companies to create a monopoly over that industry.

President Theodore Roosevelt, during his 1901-1909 tenure in office, became known as the “trust-buster.” Roosevelt knew how dangerous monopolies were to the nation’s economy, and he worked hard to bust them up before the damage could be done.

Today, we face a new and more dangerous threat to our national financial security through the hybrid of the monopoly; what I have termed the “octopoly.”

An octopoly is a supersuccessful core competent business that grows, (like octopi tentacles), non-core competent businesses from it, and collectively becomes so indispensable to the healthy operation of a free-market national economy that their risk of failure threatens the economy’s very survival.

Where the monopoly seeks to control a specific product or service, the octopoly knowingly by its sheer size and marketplace power controls or influences an entire national economy.

The economic crisis we are facing today is a direct result of an octopoly.

AIG (American International Group), the most infamous octopoly, started out in 1919 in Shanghai China selling personal insurance.

It grew quickly over the years and had great successes as an international insurance company branching out on multiple continents. In 1962, management of AIG’s U.S. holdings was given to New York businessman Hank Greenberg.

Greenberg grew the company away from personal insurance and more toward high-margin corporate insurance. He took AIG public in1969.

Thereafter, AIG grew into the world’s largest insurance company.

Over the years, AIG grew tentacles of non- core competent businesses from its successful insurance company parent and formed the following: AIG Retirement Services; AIG Asset Management; AIG Financial Services which includes its mortgage capital business, equities, private equities, fixed incomes, and hedge funds. AIG’s Financial Services division alone is one of the world’s biggest with a reported $678 billion in assets under management before receiving U.S. government bailouts.

AIG was allowed to get so big and so “diversified” that, when their risk of total collapse was threatened, many of our national leaders from presidents to senators to congressman to the Fed chair, pronounced that AIG was too big to fail and that if it were to fail, it would mean financial disaster to our national economy the likes of which had not been seen since the Great Depression.

Something has gone terribly wrong. Like 1890, we find our country in need of sweeping legislation and regulation to prevent any one company from growing into an octopoly and thereby threatening the collapse of our financial markets and our national economy. Only through new antitrust legislation, congressional oversight, and independent agency regulation and review, can we prevent the AIG’s of the world from achieving octopoly status.

Not only must the president deal with the current financial crisis, he must also work to prevent the root causes of it. The American people deserve to know that, if they are being told they must bail businesses out of their mess that at least their government is doing something to affirmatively prevent it from happening again.

Bradley A. Blakeman was the deputy assistant to President George W. Bush from 2001-2004.